South African bonds were weaker on Wednesday afternoon as the market followed the softer rand, which lost ground following the release of slightly higher inflation numbers. A pause in the recent dollar rally, however, kept losses in check. Local bond yields rose following relatively small inflows into the local market on Tuesday, despite a weaker rand. On Wednesday the rand lost a further 1.2% to the dollar as the local currency continued to react negatively to President Jacob Zuma’s unexpected Cabinet changes on Tuesday. The reshuffle is bound to cause further political turmoil ahead of the medium-term budget policy statement next week. "The political space is still in flux and we can expect that further Cabinet reshuffles may sour sentiment, providing better bond entry levels in future," said Sasfin bond trader Alvin Chawasema. Inflation‚ as measured by the annual change in the consumer price index (CPI)‚ accelerated to 5.1% in September from 4.8% in August, worse than economists’...
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